Phil Hill Reviews the State of Online Program Managers!

Dear Commons Community,

Phil Hill, a partner at MindWires, an educational-technology consulting company, reviews the current state of online-program management companies in this morning’s issue of The Chronicle of Higher Education.   He comments that colleges are increasingly turning to for-profit companies to develop and manage their online programs and that the value of the online-program-management (OPM) market is now estimated to be more than $4 billion.

However, with growth has come increased scrutiny, not only from higher-education observers but also from the federal government. In January, Sen. Elizabeth Warren and Sen. Sherrod Brown wrote an open letter, following up on one they sent in 2020, to several ed-tech companies. The letters sought more information about how the businesses operate, specifically highlighting accusations of overly aggressive student-recruitment practices and their role in the student-debt crisis. In May the Government Accountability Office released a report pointing out the lack of available information about the arrangements and recommending how the Education Department should better monitor them.  Here is an excerpt from Hills’s article.

“While the threat of new regulations is sure to affect the future of the OPM market, the current financial picture of the companies themselves might give us more insight into where the sector is heading. Consider what has happened to some of the biggest players since the beginning of the year:

  • Grand Canyon Education said, in a recent quarterly earnings report, that while its services revenue increased year-over-year, enrollment at its partner colleges was down 4.5 percent.
  • Pearson reported in a quarterly update that while its OPM business was growing, next year it will lose its largest customer, Arizona State University. (ASU, by many estimates, represents roughly one-third, or $110 million, of Pearson’s OPM revenue.)
  • Wiley said in its annual report that its OPM business saw decreasing revenue year-over-year, based on an 8-percent drop in online enrollment.
  • Coursera said in its second-quarter report that it had missed its estimates for revenue. It also dropped its estimates for revenue growth, with its OPM business losing 4 percent in year-over-year revenue.
  • Zovio’s finances have declined to the point where it was better for the company to sell its OPM assets to the University of Arizona Global Campus for just $1, in a deal in which Zovio will also send UAGC more than $14 million in cash payments.
  • 2U said in its second-quarter report that its OPM revenue had dropped 2 percent year-over-year, and it lowered full-year 2022 estimates for overall revenue by 10 percent. Total enrollments for degrees also dropped — both from fewer students and from fewer credit hours attempted per student. The company, which acquired edX last year, laid off roughly 20 percent of its staff this summer as part of its strategy to focus on profitability.
  • FutureLearn — the company created by the Open University and acting as a Europe-centric MOOC and OPM — is in a dire financial position and might not survive the next year without a new source of a cash infusion.

It turns out that the OPM business is a difficult one. And colleges with online programs — whether or not they use OPMs — can take a handful of important lessons away from the recent developments.

Good review!


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